FEATURE-As churches get political, U.S. IRS stays quiet

June 21, 2012|Reuters

The IRS has not always been quiet. In 1992 it went after theChurch at Pierce Creek in Binghamton, New York, which had boughtfull-page newspaper ads opposing then-Democratic presidentialnominee Bill Clinton.

The church lost its IRS tax-exempt status but continuedoperating, changing its name to Landmark Church when it movedinto central Binghamton several years ago.

Pastor Dan Little said the church never lost its propertytax break. At the end of the year, Landmark gives people arecord of their giving just like other churches, he said,leaving it up to them and their accountants to decide taxmatters. "We just never have made any big issue of it," saidLittle, who continues to preach about politics and morals.

In 2004 the IRS created a dedicated enforcement programfocused on political activity by churches and other nonprofits.

Called the Political Activities Compliance Initiative(PACI), it investigated in the 2004, 2006 and 2008 electioncycles 80 instances where church officials were alleged to haveendorsed a candidate during services.

According to IRS tallies made public after each election,the majority of the PACI complaints were upheld and settled witha warning that the organization comply with the ban on politicalactivity.

The IRS did not respond to Reuters questions about itsenforcement activities in recent years, or explain why they seemto have ended abruptly in 2009.

BACHMANN ENDORSEMENT A KEY

IRS church audits seem to have halted entirely in January2009. That was when Living Word Christian Center in BrooklynPark, Minnesota, successfully appealed an IRS audit. In questionwere an endorsement of Republican Michele Bachmann for Congressby pastor James Hammond and financial deals that may havebenefited him personally, a violation of IRS rules.

IRS audits of churches must comply with strict rulesdesigned to prevent undue governmental pressure. One is that ahigh-level IRS or Treasury Department official must authorizethe audit. In the Living Word case, the U.S. District Court inMinnesota ruled that the IRS staffer who authorized the auditdid not qualify.

In July of that year, Minnesota's Warroad Community Churchwas told by an IRS official that it was closing its 2008examination of the church "because of a pending issue regardingthe procedure used to initiate the inquiry." (Reuters obtained acopy of the letter from the Alliance Defense Fund, which wasrepresenting Warroad in the audit.)

Other churches that had been under IRS review receivedcomparable letters, according to their lawyers.

The IRS stopped publishing the results of its PACIinitiative. Three years later the IRS has yet to come up with anew set of church audit rules, making it impossible, expertssay, for the agency to pursue such examinations.

Former staff insist that being seen as weak on enforcementof the law would be more damaging to the IRS than any allegationof partisanship would be.

Still, tight budget may have made it easy to put offtackling 501(c)(3) disputes. Others argued the agency may worryit could lose a court case over revocation on constitutionalgrounds, and that by avoiding such a test they may preserve thedeterrent power of having the law on the books.

Whatever the reason, IRS inaction has effectively thwartedthe evangelicals' efforts to force the matter in court.

BISHOPS TAKE AIM

At the United States Conference of Catholic Bishops meetinglast week in Atlanta, bishops vowed to keep up their criticismof Obama administration policies on employer-provided birthcontrol and other controversies.

"The first principle is that American citizens don't losetheir freedom of religion or their freedom of expression whenthey become bishops," said Cardinal Francis George of Chicago.

As to what is and is not acceptable to say about candidatesfor office, "the guidelines are broader than some may interpretthem," George told Reuters at the conference. In follow-up emailcorrespondence, he declined to say whether he thought the IRSrules constrained free speech or whether he would be willing toforgo the church's tax exemption so clerics could speak outwithout restriction.

The meeting offered no public discussion of an April sermonby Illinois Bishop Daniel Jenky that has been vigorously debatedin the local and the religious press and which many thinkviolated the prohibition against opposing a candidate foroffice. The sermon has drawn a request for an IRS investigationby a watchdog group.

After asserting that Obama, "with his radical, pro-abortionand extreme secularist agenda" seemed to be on an anti-Catholicpath similar to Hitler and Stalin, Jenky exhorted all Catholicsto "vote their Catholic consciences" this fall.

Do the people in congregations follow such instructions?Only 18 percent of those polled by the Pew Research Center inJanuary said the endorsement of a candidate by their minister,priest or rabbi would sway their vote. Seventy percent said itwould make no difference.

A second Pew study this spring found that most parishionerswould prefer their religious leaders steer clear ofelectioneering, with Catholics among the most adamant.